Economy

Banking’s Effect on the State’s Economy

NJBankers commissions study on the contribution and impact that commercial banks and savings institutions have on New Jersey.

The New Jersey Bankers Association, with sponsorship support from FinPro and in conjunction with the Edward J. Bloustein School of Planning and Public Policy, Rutgers University, investigated the impact that New Jersey’s banking industry has on the state’s economy. The Economic Impact Assessment (EIA) report detailed the size of this impact.

The study was conducted under the direction of Dr. James W. Hughes, university professor/dean emeritus of the Bloustein School, Will Irving, research associate and Michael Lahr, research professor, also of the Bloustein School.

Below are some of the study’s findings concerning commercial banks and savings institutions:

  • $22B: Estimated state GDP generated annually through their activities and the economic ripple effects of their operations
  • $14B: Compensation generated annually in association with the 189,000 supported jobs
  • $1.3B: Approximately combined taxes: $726 million in state taxes and $598 million in local taxes annually in NJ
  • $1M: Each $1 million in total expenditures made by the industry is estimated to generate:
  • 9.7 direct and indirect jobs
  • $748,331 in compensation
  • $37,100 in state tax revenues
  • $30,563 in local tax revenues
  • $15.21: Bank tellers earn an average hourly wage of approximately $15.21 – 72% higher than New Jersey’s current minimum wage of $8.85.
  • 48,000: People in New Jersey directly employed who indirectly support more than 141,000 additional jobs through their expenditures.

Strong average and total industry wage growth in NJ may be indicative of a shift in the industry’s occupational structure away from lower-paying traditional retail banking jobs toward higher-paying financial and information technology jobs.

Employment and wage growth at New Jersey’s commercial banks has been strong relative to the nation in recent years.

A webinar was conducted at the Bloustein School, which presented and discussed the results of the analysis. Click here to access the webinar.

NJBankers thanks FinPro for sponsoring this significant research.

The data clearly supports the conclusion that banks are indeed an important part of New Jersey’s economy, helping to drive growth and prosperity.

To access more business news, visit NJB News Now.

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